caroline: i am caroline hyde. joe: i am joe weisenthal. caroline: the s&p 500 at a record high. automobiles dragging us lower on-chip concerns. are higher. joe: the question is "what'd you miss?" caroline: today, marking president biden's first 100 day

in the office. gdp accelerating in the first quarter after a rush of consumer spending. 6.4%. talking of consumer spending, amazon earnings after the bell, back on the growth focus. the company reporting a bullish forecast. we will still be using it post-pandemic. we would dig into the economy and president biden's plan, but first, amazon blowing us away. joe: even though there is no pandemic, people are still shopping online. once again, the wall street analysts missing. consistently undershooting. q2 net sales for amazon beating estimates. it is basically everything. aws.

eps, just crushed it. you know the drill. the stock is up. so, let's welcome our reporter. the big companies doing very well. this one is extraordinary. >> absolutely. it is in line with what we saw this week, google, facebook, apple, but amazon was the one company out of the five that was expected to have revenue growth shrink, and it did totally the opposite. it is interesting, because amazon has been getting those packages on our doorstep, and we are still expecting that, crucial given if you look at amazon revenue and where it is coming from, 30% is international. 70% here, compared to other tech

companies, which are 50-50 on average. caroline: amazon blowing it away , a dip u.s. as well, firing -- aws as well, firing on every cylinder. s&p 500 at a record high, even though we saw pullback in the automobile sector, really hurt by the supply chip issue, even caterpillar. >> absolutely. apple as well. it if you look at these correlations, i'd love to look at these correlations, if you look at the semiconductor index, which will be a key portion when we are talked about what is priced into the market, you have seen the shortage showing up in that come up because when you have more demand, it pushes stock higher, and you wonder how that will show up another's thoughts, so industrials is a great example, because we did

hear from caterpillar, like you mentioned, how is that showing up? if you look at the correlations with industrials, you have seen that build up. if you see that semiconductor rally continue, given the shortage, the demand into 2022, perhaps that means a pullback for other stocks inhibited by it. joe: great stuff. thank you. another thing moving markets today, the gdp report, confirming a strong start to the year, 6.4% growth, but the consumer, job growth coming back, government stimulus, consumption helping to drive that expansion. you see it there. let's bring in the head of u.s. economics for bank of america to talk about it more. so much interesting stuff happening in the economy now. let's start with big picture.

the gdp report. how much does this confirm the idea that we have a lot of momentum? >> i think it was very clear in the data, so not only had one growth -- headline growth, but once you dig in the details, you find strong domestic demand, consumer spending over 10% on an annualized basis in the first quarter, driven by spending, services software, so there is a lot more to come in services spending, and investment was strong. equipment investment. residential investment. intellectual. -- electro property. when you -- intellectual property. when you take some things out, you get domestic demand of nearly 11% in q1. that is a lot of momentum coming into the rest of the year. caroline: a lot of momentum when supply is trying to get up and

running. i'm wondering how much you are worrying about these bottlenecks, particularly chips? >> there is a tension in the economy, going back to economics 101, demand is outpacing supply. chairman powell spoke about this dynamic yesterday, fueled by reopening, and it is happening fast. it is taking longer for the supply to accommodate that. working against the supply-side are the supply chain issues, particularly categories like semiconductors, playing out in the automobile sector, concerns over labor shortages, so it will take some time for the supply-side to catch up. there is no reason it can't, and that should lend itself to strength. joe: this is the key question, that there is no reason it

cannot. that is the core assumption when the fed chair and other economists talk about transitory inflation. so far, we have not seen it. it seems to be getting worse. caroline mentioned the chips. that does not seem to be getting better yet for the car companies. look at lumber. we had a sawmill company said today they could not hit their estimates, because they were having shortages of freight and majestic's in the trucking -- logistics in the trucking and rail companies, so there is compounding bottlenecks at the margins. what does it look like? do you have a timeline for the supply-side? >> you are 100% right. you should see the supply curve shifts out, so there are challenges, but there are reasons behind all of these

challenges on the supply-side, whether it is what happened around the delays, supply chain issues as a result of the fact there are a lot of concerns. so, i think it is reasonable to argue that these are issues that can be resolved, and there is clearly an incentive to do so on the part of manufacturers, producers. it is just a matter of having enough time to get through these challenges to meet the increasing demand. i imagine the next few months that this tension will continue. it's not something that we can snap our finger to resolve. that is with the fed wants to see play out. how does this end up working itself through, and what that means for prices. caroline: michelle, you will be

sticking with us. we will be digging into the tight supply, not just supply chains, but u.s. housing. this is bloomberg. ♪

caroline: today, we focus on the u.s. economic recovery. we get gdp, jobless claims, housing. joe: yes. impressive numbers continuing for housing. pending home sales came in lighter then expect patients. part -- expectations. it is hard to have a boom when there is essentially no

inventory in home sales out there. the question is when will things improve or slow down in some way? let's bring in michelle, head of u.s. economic for bank of america. this includes some of the commodity stuff. when do we see demand start to abate? prices go up fast, so buyers have to pullback. are we seeing any indication of that in housing yet? michelle: it does not appear we are seeing that. the housing market, the biggest thing is the lack of supply, as noted. when you think about the market, we are close to record lows, the number of days in the market is short, and builders are aware. you are seeing phenomenal building permit numbers, ramping up construction to add to inventory, which helps to ease

some of the price pressure, but i don't think it is a pricing issue. it is a lack of supply. one of the reasons i suggest this is that if you look at the survey data from the university of michigan for housing, people are not saying prices are too high and it's not a good time to buy, because prices are high, but we have had an influx of money comes a people have cash on hand, and interest rates are still low. caroline: it is a tale of the haves and have-nots. if you're living by to miss check, you cannot do that now, particular with supply thin. i am aware of the inequality in this debate, but what happens when it comes on tap? does equilibrium come? do we remain at elevated levels? michelle: yes.

the inequality story is extremely important, something that gets lost when you talk about aggregate numbers for the overall economy, and that is something we have to consider when we talk about the economic trends. the second about when does it normalize or not normalize, i think the economics should work, the market should sort itself out, supply being able to catch up, and for housing, it is straightforward, because builders are ramping up construction. if you're thinking about the level of building permits and extrapolate that ford, we will have -- forward, we will have a lot of homes in the coming months. there are obstacles, lumber prices are high and they have to figure out how to pass on the prices, challenges around labor shortages, so there are

frictions, but i think the desire is to accommodate the market and add to the supply, particularly for housing, given the demand, i think it is there, and that will affect home prices. we think 12% year-over-year, and by the end of the year, we should be down to single digits. caroline: thank you, michelle. all things housing. just single digits. we thank you so much. coming up, a conversation on the latest plans by president biden to address inequality. this is bloomberg. ♪

caroline: president biden reaching a milestone today, first 100 days in office. here are his accomplishments and challenges ahead. >> this week, we inaugurate a new administration and pray for its success in keeping america safe and prosperous. >> president donald trump in those remarks was calm and collected, but it was any thing but that in january. covid-19 cases, franchise, millions out of work -- fresh highs, millions out of work, americans left reeling from the january 6 attack. donald trump white house was for many chaotic. the talent of the joe biden presidency shifted washington. in his first 100 days, he

surpassed the goals he set for vaccinations, passing the one-point trading none -- $1.9 trillion economic bill. >> it would change the lives of millions of people in concrete, specific ways. >> he convened world leaders to confront the climate crisis. the next 100 days and beyond potentially could be more turbulent. he faces a human rights challenge on the southern border, new variants fueling the pandemic, and troubling signs the u.s. is running out of people who want the vaccine. his proposal to double the capital gains tax rate for wealthy individuals is already rattling markets. >> a 40% capital gains tax is a huge headwind for the u.s. stock market. >> the american jobs plan, the 2.5 trillion dollar infrastructure bill is not certain to pass -- the $2.5 trillion infrastructure bill is not certain the past.

reform, politics, compromise. as the administration was ford, it will be marked not by the first 100 days -- forward, it will be marked not by the first 100 days, but years. >> i would like to meet with people with better ideas. i welcome those. the rest of the world is not waiting for a spirit i want to be clear. from my perspective, if we do nothing, it is not an option. caroline: within that speech, president biden outlined the new american families plan, where most workers would have access to paid family medical leave. the former chief of staff for michelle obama and ceo of a foundation, the person who has been pushing so hard for paid leave, vocalizing the concern about the crisis. how realistic do you think this

is to get through? guest: it is a smart proposal. with the president did was leave paid leave in. if you look closely at, you don't get 12 weeks for everyone all at once. you phase it in over 12 years. when family leave for new parents first, then working your way across the workforce, so it is a smart proposal to get paid family leave on the table. to the point that the president set the rest of the world is not waiting for us, we are one of only two countries that does not have a national paid leave policy, so guess what? our companies want to give paid leave to workers. they are paying out of their pockets. that is putting small business at a disadvantage, and global companies at a disadvantage, companies and other countries where there is support for paid family leave. joe: that is an interesting

point about shifting some of the burden off the corporate balance sheet, the corporate payroll onto the government's books. when you talk to companies, how much is that appealing to them to level the playing field? guest: i think more and more companies are seeing it. the interesting thing about this moment is everyone now realizes the caregiving is a problem. ceos have had to work from home with kids home from school. you cannot just go to work and ignore the home front anymore. now i see businesses feeling the urgency as workers have been feeling it for generations, so there is a desire for companies, and a lot of companies can do it. a lot of the big players do it already, but we know four out of five private sector workers come have it. they are smaller companies, startups, and they can't afford to do this on their own. a national paid the program was spread that cost across everyone

in the economy and help, and it pays off. it creates jobs. it creates economic activity. we know from the economic analysis that it is stimulus to the economy. caroline: in music to the economic analysis done by the treasury. janet yellen herself also taking to twitter to say your exact point, childcare, other programs have not been seen as crucial investments because of a failure of perspective. who have the few holdouts that it been doing this and think, no? guest: it is not businesses. we are hearing from businesses they want this and need this. it is not citizens who live in red states. we did a survey. we found that not only do nine

out of 10 people supported, republicans come too, so constituents in red states and red districts, it is their elected leaders who seem to be not getting the message in washington. one of the things that needs to happen is they need to hear that message from the constituents, because we know that the vast majority of american people, regardless of geography, need this. joe: should there be some benefit to families that homeschool or where only one parent works, or another situation in which a federal paid fee program for working parents or people who go out to the workforce may not help them as much? guest: one of the great things about the proposal is that he takes a comprehensive approach was so paid leave works together with things like investment in

childcare and universal pre-k. it works with the system of a $400 billion investment for the elderly. if you are homeschooling your kids, you may need home care services for a parent, and you don't want to see them sent to a nursing home. right now, you are on a waiting list for years. an investment in affordable care act available to you, that is part of the package. that is what we need, a system of caregiving that works from when you have young children, to wind url delete, and everything in -- when you are elderly, and everything in between. caroline: you've been talking about that since last year. it must be wonderful to hear it coming from the president. thank you for giving us the perspective. meanwhile, that does it for "what'd you miss?"

we will be digging into bloomberg "technology" in a moment. joe: that is next. have a great evening. this is bloomberg. ♪

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emily: i am emily chang in san francisco. this is "bloomberg technology." coming up, amazon beats estimates. the pandemic momentum is not waning as the world reopens. shares surging after hours. qualcomm